Construction giant in free fall

IN DEBT: UNABLE TO COVER ASSET-BASED FINANCE

The Liviero Group has been placed under business rescue.

Liviero Civils and Mining both under voluntary business rescue, claims R126m is owed to them.

The Liviero Group, which describes itself as “South Africa’s largest privately black-owned multidisciplinary construction group”, has been placed under voluntary business rescue as local contractors continueing to state that government tenders have dried up.

In a sworn statement Luca Liviero said government clients owed Liviero Civils R81 million. This has had an impact of R24 million on the group’s ability to recover plant hire and other costs.

Despite legal proceedings the amounts are still unpaid, Liviero states.

Work stoppages due to strikes, community unrest and safety issues that were no fault of its own cost Liviero Mining R45 million in revenue, the group states.

“With a shortfall in revenue and on a fixed-cost base, Liviero Group has not received its full quantum of overhead recovery and fixed monthly cost to cover the asset-based finance.

“The Liviero Group has currently not honoured its financial obligations to its instalment sales and finds itself in breach of the respective instalment sale agreements,” he said.

In a similar statement in support of the business rescue application for Liviero Mining, Liviero says due to external factors, like late payments, community unrest and safety-related stoppages imposed on its clients, “we are not in a position to create enough revenue to maintain a profitable position”.

Liviero Mining last year got a R130 million loan from the Industrial Development Corporation (IDC) to pay its creditors and maintain its plant fleet.

“Due to a delay in the payment of this loan, we were not in a position to apply the earmarked funds to equipment mid-life maintenance, but instead had to apply these funds to the shortfall created by the rainy season, as well as the December break.”

Government owes Liviero Civils R81 million